Mortgage Applications Tumble as Refinancing Demand Sags

Applications for U.S. home mortgages tumbled last week as demand for refinancing sagged for the second week in a row, an industry group said Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, dropped 9.6 percent in the week ended Aug 26.

The MBA's seasonally adjusted index of refinancing applications slumped 12.2 percent, while the gauge of loan requests for home purchases edged up 0.9 percent after setting a 15-year low set the week before.

"Refinance application volume declined for a second week from recent highs, despite rates staying near a 10-month low, while purchase volume remained near 15-year lows," Mike Fratantoni, MBA's vice president of research and economics, said in a statement.

The refinance share of mortgage activity decreased to 77.8 percent of total applications from 79.8 percent.